Oregon governor says he’ll call special session

By JONATHAN J. COOPER

Associated Press

Published:September 19, 2013 9:12AM

Kitzhaber calls legislature back to Capitol to take up taxes, public pensions — and GM crops

SALEM, Ore. (AP) — Gov. John Kitzhaber said Wednesday that he plans to call Oregon lawmakers into special session to vote on measures affecting taxes, public-employee pensions and the regulation of genetically modified crops.

The special session would begin Sept. 30, capping months of negotiations between the governor and legislative leaders from both parties.

Kitzhaber said the agreement would boost education funding by $140 million to restore canceled school days in some districts and lower college tuition. In a cheerful statement, Kitzhaber applauded lawmakers “for once again coming together for the benefit of all Oregonians.”

But House and Senate leaders sounded a much more cautious tone, immediately issuing a joint statement saying simply that they “are making progress.”

“There is still hard work ahead to determine whether we have the votes from each caucus needed in order to pass this proposal,” said the statement by House Speaker Tina Kotek and Senate President Peter Courtney, both Democrats, along with Rep. Mike McLane and Sen. Ted Ferrioli, the Republican leaders.

The governor’s office said the deal includes further cuts in retirement benefits for government employees, limiting the annual inflation increases in retirement checks. Combined with cuts in the cost-of-living adjustment enacted earlier this year, the changes would erase $4.6 billion from the Public Employees Retirement System’s unfunded liability and reduce the amount that state and local governments — including school districts are required to contribute.

The improving recovery has boosted tax collections at state and local governments, but much of the additional revenue has had to cover steep increases in PERS costs due to massive investment losses during the Great Recession.

“Sept. 30 now stands as a turning point for the future of our public schools,” said Betsy Miller-Jones, director of the Oregon School boards Association, a vocal advocate of cutting pension costs. “It’s an opportunity to make a lasting change for our children and our state.”

PERS cuts enacted earlier this year are already the subject of a legal challenge by public-employee unions and retiree groups, which are vowing to challenge any additional cuts as well. They say the state is illegally breaking a contractual obligation.

The deal also would raise $240 million in new revenue. The governor’s office did not release details, but talks have focused on higher cigarette taxes, an increase in some corporate taxes and a limitation on a tax deduction for seniors’ medical expenses.

Some businesses known as pass-through corporations — which are taxed on their owners’ individual income tax returns — would pay a lower tax rate. Republicans who pushed for the change said it would spur job creation, but liberal groups worry it will create a tax loophole for the wealthy.

Certain agricultural exporters also would pay a lower tax rate.

To sweeten the pot for Republicans, many of whom are reluctant to vote for higher taxes, the deal also would include a bill prohibiting local governments from regulating genetically modified crops. A ballot measure already planned in Jackson County would be allowed to stand if voters approve.

Kitzhaber agreed to write a letter saying he won’t sign any bill produced in a special session unless he signs them all — a pledge to Republicans that he won’t veto their priorities after they help pass the measures sought by Democrats.